Standard Bank Warns Sovereign Debt Flight Could Raise Government Funding Costs as AMP Cuts Bond Holdings
Updated
Updated · Bloomberg · Jul 6
Standard Bank Warns Sovereign Debt Flight Could Raise Government Funding Costs as AMP Cuts Bond Holdings
2 articles · Updated · Bloomberg · Jul 6
Summary
Steven Barrow, Standard Bank’s head of G10 strategy, said investors seeking protection from market turbulence should increasingly look beyond government bonds because they are no longer behaving like reliable safe havens.
AMP Ltd. sharpened that warning last week by scaling back its government bond holdings, citing evidence that sovereign debt is losing the defensive role investors have traditionally relied on.
A broader shift out of sovereign debt could create funding pressure for governments if demand weakens, turning a portfolio-allocation change into a borrowing-cost risk.